Virtual Production Market Size, Share & COVID-19 Impact Analysis, By Type (Technology/System and Services), By Application (TV Series, Commercial Ads, Movies, E-sports, Others (Online Video, Events, Music Concerts)), and Regional Forecast, 2022-2029

The global virtual production market size was valued at USD 2.54 billion in 2021 and is projected to grow from USD 2.86 billion in 2022 to USD 7.19 billion by 2029, exhibiting a CAGR of 14.1% during the forecast period. Based on our analysis, the global virtual production market exhibited an average growth of 12.0% in 2020 as compared to 2019.

In the scope, we have considered key players, including Adobe, NVIDIA Corporation, Sony Group, Glassbox Technologies, Pixotope, Autodesk, Aximmetry, mo-Sys, Technicolor, and Sony Group, among others who provide systems and services for pre-production, production, and post-production stages.

Digital transformation in the media and entertainment industry is changing the way people perceive or understand online content. Digital transformation enables companies to achieve sustainable growth and development and reach their full potential. The introduction of various movie technologies, including VFX, CGI, and virtual production has helped filmmakers imagine, plan, and capture a scene via virtual or stimulus cameras.

Technological advancement has helped creators of the movie by providing an outdoor experience in a production studio without actually going outside to shoot the scenes by spending money. However, these factors are driving the market growth.

COVID-19 IMPACT

Production Brands are Shifting to Virtual Production amid Pandemic to Boost the Market Opportunity

The COVID-19 pandemic has posed unprecedented challenges to the production process as producers, studios, and networks worked to find ways to safely resume filming.

The pandemic has accelerated the technology-led transition toward production technology in television and films to overcome these challenges. Many Hollywood movies, such as Mission Impossible 7 and the Batman, had to stop their production due to the pandemic. However, the technology helped the production companies to get the camera up and rolling again, allowing production members to work simultaneously across the globe.

This technology helped reduce the traveling cost for shoots, allowed directors to make changes later in the film’s production, indirectly advocated for social distancing, and allowed filmmakers to create full scopes of movies without ever having to force people onto production sets.

For instance, VFX artists create landscapes of New Zealand digitally, allowing a director who is in Spain to plan the film with a mixed reality helmet. Then the director works with a production designer in London to figure out the position of the characters. This means that no matter how far apart the production team is, the creative process will never be delayed.

In the post-COVID-19 world, this production technology will advance much of the visual work rather than expensive post-production processes, allowing filmmakers to plan their shoots differently.

This factor is expected to boost the market growth post-pandemic crisis.

LATEST TRENDS

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Adoption of Virtual Production Software in Animated Industry is Propelling the Market Growth

Virtual production, in particular, has enormous benefits for the animation industry as animated films have huge fan bases and the advent of this production technology is about to make the industry a remarkable development. Animation is labor-intensive and time-consuming, requiring minute detailing and precision. This technology can improve the efficiency of animation workflows.

Employing this technology can save time and allows the creation of more content in less time. For instance, animating a character’s movement and interaction with the environment using the traditional method is extremely time taking.

Production solutions help create images in a real-time, customizable engine, bringing greater clarity to the entire filmmaking process. This technology removes the hurdle between virtual backgrounds and physical set pieces, blending elements seamlessly to produce a more finished output. As technology advances rapidly and the requirement for animated content increases, production technology is undoubtedly set to revolutionize the animation industry.

DRIVING FACTORS

Increasing Adoption of VFX in Movie Production to Propel the Virtual Production Market Growth

The growing demand for high-quality content has led to the increasing adoption of VFX. VFX is designed to modify, create, and enhance live-action media to include effects that may not be captured during live-action filming. This helps create special effects such as fire, explosions, creating creatures, destroying objects, and helps viewers get to know the story better. VFX is also widely used in TV shows, movies, commercials, games, and more.

Furthermore, there is an increasing demand for digital video streaming outlets such as Netflix, Amazon Prime Video, and Hulu. Owing to this, the high-quality content and VFX turn out to be important in the overall market. Smart devices such as HD TVs, smartphones, laptops, and tablets are also increasingly being used to fuel the growth of digital video streaming services. Some video services and studios also use VFX in their movies and TV shows. Most importantly, buyers looking for VFX experience in high definition have a positive outlook on VFX, and this is driving the market.

RESTRAINING FACTORS

Lack of Skilled Professionals to Restrict the Market Growth

During the COVID-19 pandemic, the market experienced huge growth as the media and entertainment industry shifted to this technology. The technology has been used for making films and web series. However, many issues were raised during this shift, and one of them was the scarce hands-on experience of the high demand for technology.

The shifting of roles within the film production pipeline and the introduction of roles from the game industry result in new creative and communication issues. However, shortage of trained technicians is restricting the market growth.

SEGMENTATION

By Type Analysis

Growing Adoption of Virtual Production Technology to Surge Technology/System Demand

By type, the market is bifurcated into technology/system and services.

In 2021, technology/system segment accounted for a larger market share and is projected to grow with a high CAGR during the forecast period. The technology/system segmental growth is attributed due to the increasing demand for VFX and computer-generated imagery in movies, web series, and others.

Additionally, continuous technological advancements in production software solutions enable the development of engaging content by integrating advanced VFX capabilities. Moreover, increasing the incorporation of machine learning and deep learning into production solutions is expected to increase the demand for developing software with more value-added features, thereby driving the growth of the technology/systems segment.

By Application Analysis

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Extensive Rise in Use of Virtual Production System in Movies to Fuel the Market Growth

By application, the market is classified into movies, TV series, commercial ads, E-sports, and others (online video, events, music concerts).

As per the analysis, the movies segment dominated the market. Significant increase in movie production budgets and increased use of VFX by Hollywood movie studios and other regional movie studios are driving the growth of this technology in movie applications. The increasing trend of shifting film transmission from cinema and multiplex to Over-The-Top (OTT) platforms will enable filmmakers to reach a wider audience, thereby increasing the demand for technology for film applications during the forecast period.

REGIONAL INSIGHTS

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The market is geographically studied across North America, South America, Europe, the Middle East & Africa, and Asia Pacific, and each region is further studied across countries.

Our findings show North America generates the maximum revenue share during the forecast period. The market in the region is driven by an increase in the adoption of Augmented Reality (AR), Virtual Reality (VR), Artificial Intelligence (AI), and other advanced technologies in the media and entertainment sector.

The market growth in the region is attributed to the widespread adoption of this technology by major film studios such as Viacom CBS, Walt Disney Studios, Warner Media, and others. Moreover, increasing investments by companies in R&D activities to develop advanced production solutions support the market growth in North America.

• For example, in June 2020, Epic Games, Inc. updated PlayStation software Unreal Engine 4.25, and introduced an enhanced version of Unreal Engine 5.

The Asia Pacific region has the highest adoption rate of production technology in film studios. China, India, Australia, Japan, and South Korea are the major economies driving the demand for these solutions. Online video streaming is gaining traction in the region, and on-demand video content is gaining popularity among the region's youth, thereby positively impacting the virtual production market share. Additionally, the region's film industry is one of the first to use technologically advanced filmmaking solutions. However, based on analysis, the market in the region will grow with a high CAGR during the forecast period.

 KEY INDUSTRY PLAYERS

Strategic Acquisition to Boost Market Expansion of Key Players

The key players in the market are focusing on offering innovative solutions and are investing more in their research and development activity for introducing new products and reinventing their existing products to enhance their presence and customer base.

Moreover, players are adopting strategies, such as partnership, and acquisitions, to expand their business in various geographies. The key players adopt this strategy to improve their customer experience and offerings.

May 2022 – Technicolor entered into a partnership with Paramount Pictures. This partnership was aimed to bring the fully CGI (computer generated imagery) Sonic to life in Sonic the Hedgehog2 in collaboration with MPC, a Technicolor Creative Studios

May 2022 – Mo-Sys Engineering Ltd. partnered with GMS International to make virtual production and augmented reality solutions available for South Korean cinematographers and broadcasters.

List of Key Companies Profiled:

• Adobe Inc. (U.S.)


• Technicolor (France)


• NVIDIA Corporation (U.S.)


• Sony Group (Japan)


• Autodesk (U.S.)


• Pixotope Technologies (Norway)


• Aximmetry (Hungary)


• Mo-Sys Engineering (England)


• Glassbox Technologies (U.S.)


• AV Stumpfl GmbH (Austria)

KEY INDUSTRY DEVELOPMENTS:

• May 2022 – Mosys Engineering Ltd. introduced a new virtual manufacturing course to meet the growing need for educated technicians in the industry.


• April 2022 – HTC VIVE announced the launch of VIVE Mars CamTrack, the first turnkey virtual production product. This product makes software affordable, easy, and fast by integrating the tracking workflow of the complete camera into a close-packed, plug-and-play module with professional features.


• August 2021 – NEP Group introduced a new operating segment in virtual production named NEP Virtual Studios. NEP Group acquired Halon Entertainment LUX Machina, and Prysm Collection to broad the industry leaders in real-time production.


• January 2020 – With crystal LED, Sony Group expanded their video creation to the next level. Sony Innovation Studios renewed venues and sets for TV and film production using the latest technology that captures 3D volumetric point cloud data in Japan.


• March 2020 – Cubic Motion, a provider of automated performance-driven facial animation technology, was acquired by Epic Games. This acquisition enriched visuals and three-dimensional graphics environment for users of Epic Games solution.

REPORT COVERAGE

An Infographic Representation of Virtual Production Market

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The research report highlights leading regions across the world to offer a better understanding to the user. Furthermore, the report provides insights into the latest industry and market trends and analyzes technologies deployed at a rapid pace at the global level. It further highlights some of the growth-stimulating factors and restraints, helping the reader gain in-depth knowledge about the market.

REPORT SCOPE & SEGMENTATION